The success of HGTV and the plethora of online information has shifted the ground rules of real estate sales
Any seller who has not sold a home in the past five years is in for a shock: Everything they thought they knew about selling a home has changed.
Sellers who do not understand the new rules of engagement can easily make costly mistakes and jeopardize their chances of a sale.
3 fundamental changes
These three changes have altered the homebuying and selling landscape forever.
Change 1: The advent of HGTV
Buyers spend countless hours watching HGTV and have developed extremely refined tastes. They know what they want and when they look at homes for sale. They are looking for properties that look similar to what they have seen and liked on TV.
Change 2: The advent of mobile devices and HD internet connectivity
Buyers used to have to visit a home to add or remove it from their short list. No longer the case, today’s sellers have between seven and 10 seconds to sell their home, and those seconds are on a mobile device anywhere on the planet — not in any home for sale.
If a buyer does not like an online listing, they will move on to the next home in a heartbeat and will usually not come back to review.
If they do not like what they see on their device, they will never waste their time visiting in person.
Change 3: The advent of internet real estate sites
Realtor.com, Zillow, Trulia and a host of broker-owned sites have populated the internet with user-friendly websites that provide property data, historical facts, HD pictures, automated valuations, neighborhood and school info, and more.
They have completely removed the need for buyers to visit in person to determine if they like a home. Once a buyer has shortlisted available inventory, they only visit the select few they like.
These three changes have not only revolutionized the way buyers search for and view prospective homes, they have transformed what they buy as well. Historically, there were three groups of buyers:
Top-tier buyers: Willing to pay a premium, this group looked for move-in ready homes that had all the amenities they were looking for.
Middle-tier buyers: Looking for homes in “original” condition, this group hoped to get a decent price and then improve the home over time with sweat equity.
Bottom-tier buyers: This third group were contractors and flippers looking for distressed properties they could buy for 60 percent to 70 percent of retail value.
The middle tier, which historically represented a significant percentage of market sales, is disappearing. More comfortable with tech than construction, today’s buyers are forgoing the middle tier en masse and paying more to obtain move-in-ready homes that look like the finished properties they have seen on HGTV.
This is not simply the consequence of real estate-related technologies. The past few years have seen sweeping societal shifts as homebuyer wannabes, for many reasons, are less willing or even capable of fixing up a home they’ve purchased.
They know exactly what they like when they see it, but have almost no idea how to produce it themselves. The No. 1 question buyers ask about our listings is, “Can we buy the staging?”
With buyers moving away from “original condition” properties they perceive as needing upgrades, homes that appear in the middle tier are being forced down into the bottom tier and need to be priced accordingly. Sellers who do not understand this new reality stand to end up with far less than they imagined.